Forced Blackout: What Contract Law Tells Us About Coronavirus and the NBA Broadcast Deals

Forced Blackout: What Contract Law Tells Us About Coronavirus and the NBA Broadcast Deals

After Utah Jazz Center Rudy Gobert tested positive for the novel coronavirus known as COVID-19, the National Basketball Association (NBA) suspended its 2019-20 season indefinitely. The move has major implications for the league’s broadcast partners, who stand to lose a serious amount of advertising revenue without games to air.

Having no NBA games also undercuts moneymaking NBA-adjacent programming like “Inside the NBA” and “SportsCenter,” as New York University Professor Lee Igel noted to CNN. In sum, the disruption will significantly impact the bottom line for broadcasters.

Entities like ESPN and TNT may be considering whether there is any legal recourse to recoup some of the millions they stand to lose. For the last couple of weeks, Sports Illustrated’s Michael McCann has been writing about the implications of the NBA’s response to the coronavirus outbreak. On March 7, discussing corporate sponsorships, McCann first raised the specter of force majeure clauses in league agreements playing a role in the resolution of legal claims. Force majeure clauses “allow one side in a contract to suspend or end its obligations on account of an extraordinary and uncontrollable circumstance.” These clauses are usually interpreted to cover natural disasters and other “Acts of God,” under which a global pandemic would almost certainly fall.

In addition to sponsorship deals, McCann speculated that the NBA’s broadcast “contracts might [also] contain a force majeure clause.” If so, “a network could insist it shouldn’t have to pay when the games aren’t being played due to a pandemic.” McCann also noted that even in the absence of such a clause, the “contracts likely contemplate the consequences of suspended games.”

At common law, courts have sometimes excused nonperformance of contracts under the doctrine of impossibility. See, e.g., Opera Co. of Boston, Inc. v. Wolf Trap Foundation for the Performing Arts, 817 F.2d 1094 (4th Cir. 1987). Did the rise of the COVID-19 pandemic make playing the games “literally impossible?” Given the massive drawdown in public gatherings and the fact that multiple NBA players have already tested positive for the virus, the answer might well be “yes.”

Of course, doctrine aside, one must consider that the payments in question would be made to the league in the context of longer-term agreements. And to be sure, “broadcasters don’t want to jeopardize long-term relationships over what will likely be a short-term drop in revenue.” As such, it is unlikely the parties will actually end up in court; particularly against the backdrop of an ongoing national emergency, any litigation on this issue would probably engender a negative sentiment against all involved.

The point is likely moot. Ultimately, it would be a shock if the two parties did not instead quietly negotiate a way forward. The symbiotic relationship enjoyed by the networks and the league has only gotten stronger in recent years, as evidenced by the $24 billion deal that the NBA struck with ESPN in 2014. And while a short downturn in revenue will be a difficult pill to swallow, both sides know there are plenty of billions to be made together going forward. 

Eli Nachmany is a Sports Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first-year student at Harvard Law School (Class of 2022).

“IMGP0307” by joshua_d is licensed under CC BY-NC-ND 2.0 

Lucky 7s: NFL Looks to Expand Playoffs to Seven Teams per Conference in New CBA

Lucky 7s: NFL Looks to Expand Playoffs to Seven Teams per Conference in New CBA

ESPN’s Adam Schefter is reporting that the National Football League (NFL) is considering some changes to its playoff structure in the new Collective Bargaining Agreement. The NFL’s CBA could be finalized as soon as next week, and it appears that the biggest change will be expansion of the playoffs from 12 to 14 teams.

Traditionally, the NFL has rolled with a 12-team playoff, with six representatives from each of the two 16-team conferences. In each conference, the No. 1 and No. 2 seed enjoy a bye week for the first round of the playoffs, then each play the winner of either the first weekend’s No. 3 vs. No. 6 or No. 4 vs. No. 5 matchup.

To accommodate a seven-team playoff, the league will add another wild card slot and take away the No. 2 seed’s first round bye. The No. 1 seed will retain a first-round bye, and you’ll have a 2/7, a 3/6, and a 4/5 game. If the new structure is otherwise consistent with the current model, the lowest-advancing seed (in order: No. 7, No. 6, No. 5, No. 4) will play the No. 1 seed in the second round, while the other two advancing teams will play one another. If the new structure is otherwise consistent with the current model, the lowest-advancing seed (in order: No. 7, No. 6, No. 5, No. 4) will play the No. 1 seed in the second round, while the other two advancing teams will play one another. As such, the league gets to add a game to Wild Card Weekend (the first round of the playoffs) and give another team a foot in the door.

The proposal does not seem to be a contentious one. Indeed, Schefter’s article quotes a source who stated about the playoff expansion: “That’s been agreed to for a long time. There wasn’t a lot of disagreement to that issue.” The contention between the league and the players union (the two relevant parties for ratification of the new CBA) is likely to come from the prospect of expanding the regular season from 16 to 17 games. The owners are offering to bump the player revenue share from 47% to 48.5% if the players will agree to another game. There is likely a wage premium at which the players would agree to the shift, but it’s unclear what the number is.

As for the playoff expansion, it’s obvious why the NFL is making the move. This year, viewership for the NFL’s Wild Card Weekend reached a four-year high. Fan interest in these games is increasing, and the NFL is well-positioned to increase the supply of postseason games given the obvious demand. Adding two playoff teams allows the league to keep two more markets engaged for another (particularly significant) weekend of football, and could further increase league parity.

Other leagues feature large playoffs. More than half of the teams (16 of 30) in the National Basketball Association make the postseason, and Major League Baseball (another 30-team league) just proposed moving to a 14-team playoff format of its own. To be sure, there is probably a point for the NFL at which the number of teams in the playoffs diminishes the importance of the regular season, undermines the impressiveness of a postseason berth, and hurts the league. 14 teams is probably not it, but 16 might be and 18 almost certainly is.

Let’s look at the last five years (The Ringer looked at the last ten, which basically tracks with the below observations): In 2019, the AFC and NFC additions would have been the 8-8 Pittsburgh Steelers and the 9-7 Los Angeles Rams. In 2018, the No. 7 seeds would have been the 9-6-1 Steelers and the 8-7-1 Minnesota Vikings. The 9-7 Baltimore Ravens and 9-7 Detroit Lions would have made it in 2017. 2016 would have seen the 9-7 Tennessee Titans and the 9-7 Tampa Bay Buccaneers. And the two extra teams in 2015 would have been the 10-6 New York Jets and the 8-8 Atlanta Falcons. Fortunately for the proposal in question, a strong majority of these teams had winning seasons; the two teams that didn’t were both .500.

But in three of those five seasons, if the playoff had been 16 teams, one of the No. 8 seeds would have been a team with a losing record. Expanding to that point would cheapen the playoffs; the NFL’s sweet spot for playoff expansion is probably 14 teams.

Owners recently voted (though not unanimously) to advance the CBA, and now the players will consider the proposal. While the two sides iron out other issues, the playoff question appears settled. So get ready for bigger graphics on ESPN from Weeks 14 to 17, depicting which NFL teams are still fighting for playoff spots—with this shift, more football clubs will now be listed in these graphics under my favorite phrase in football: “In the Hunt.”

Eli Nachmany is a Sports Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first-year student at Harvard Law School (Class of 2022).

“Open end to the Allegheny River” by R.A. Killmer is licensed under CC BY-NC-ND 2.0 

Disney Extends “Baby Yoda”  Infringement Battle on Etsy Website

Disney Extends “Baby Yoda” Infringement Battle on Etsy Website

Disney has unleashed a wave of takedown notices targeting vendors who are selling merchandise featuring “Baby Yoda,” the viral breakout character from its new streaming series, The Mandalorian, on DIY sales site, Etsy. The studio becomes the latest company to struggle to protect its intellectual property on the site, despite its formidable legal resources and penchant to fiercely guard its properties.

Disney’s woes began shortly after the character debuted in December, when fans of the character, officially known in the series as “The Child,” started selling homemade Baby Yoda shirts, mugs, dolls, ornaments, and backpacks, in violation of Etsy’s IP policies. Disney specifically delayed manufacturing and selling products featuring the character until well after the premiere of the show, due to fears that the merchandise release would spoil plot details for the series. Despite Disney’s efforts to ban alleged infringers from the site, as of this month, Etsy searches for “Baby Yoda” still return over 11,000 results, raising several questions:

Why is one of the most powerful entertainment organizations in the world unable to stop such rampant infringement? And, if Disney cannot solve IP concerns created by sites like Etsy, who can?

Widespread infringement on Etsy is facilitated by the fact that, unlike sites like YouTube, which use automated features capable of mechanically identifying possible instances of infringement, Etsy requires users to identify and report each instance of potential instances themselves on a case-by-case basis. Relying on the so-called Safe Harbor provision to the Digital Millennium Copyright Act (DMCA), which relieves sites of the responsibility to aggressively and proactively police and remove infringing content, Etsy employs a reporting system which would require Disney representatives policing infringement to manually search through the over 10,000 potential instances of Baby Yoda infringement on the site at any given time. On top of this, Disney also must target infringers who aim to evade detection by avoiding key words explicitly linked to Star Wars, selling items under descriptions such as “Baby Alien” and “The Baby Child.” Even for a company like Disney with vast resources, effectively policing this much content via human-led searches and assessments could be difficult, if not impossible.

With official Disney Baby Yoda merchandise not set to hit the market until this March, Disney could stand to lose lots of potential revenue if the Etsy infringement is not stamped out. However, many scholars, such as Texas A&M law professor Glynn S. Lunney, warn that draconian policing on the part of Disney could potentially be harmful to the company. Lunney explains that “because it’s an avid fan base” creating the merchandise, Disney could upset and “alienate” future potential customers.

While Disney has turned to takedown notices to deal with unlicensed Baby Yoda merchandise, it is yet to be seen whether, moving forward under the current DMCA regime in a cultural landscape in which “meme-able” overnight stardom is possible, what future strategies the company will employ to protect its IP.

Matt Shields is an Entertainment Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and current second year student at Harvard Law School (Class of 2021).

Image: “Yoda – Gentle Giant – Mini Bust” by fs1997 is licensed under CC-BY-NC-SA 2.0.

Interview with Jim Acho

Interview with Jim Acho

In December, prominent sports attorney Jim Acho sat down with Madison Martin (’21) to discuss his career in the industry, the NFL Players’ Association, and the future of collective bargaining and concussion lawsuits in the NFL. Acho is a partner at Cummings, McClorey, Davis, & Acho, P.L.C. In 2015, Jim made national news when was nominated for and ran for Executive Director of the NFL Players Association. He continues to represent retired NFL players in concussion claims, and most recently was cited by the New York Times in their November 2019 article, ‘Emboldened’ N.F.L. Players Value Health Over Paychecks.

The interview was conducted by Madison Martin ’21 (Online Content Chair, Sports) and Daniel Alford ’20 (Executive Editor, Online Sports Content), from the Harvard Journal of Sports and Entertainment Law. It has been edited for clarity.

– – –

MM: Thank you so much for taking the time to speak with me today, Jim.

JA: Not a problem at all, happy to discuss my experience in the industry and any other questions you may have.

MM:  Early on in your career, did you know you wanted to focus your practice on the sports industry or did you have an interest in labor first?

JA:  I joined a firm my dad started five decades ago with a few other attorneys that had its roots as a labor and employment firm. I do a lot of non-sports related labor and employment, mostly representing people that have been wrongfully terminated. I also represent a lot of police officers in excessive force cases, we get involved in a wide range of employment matters. It morphed into a sports interest, and although I never practice sports law full time, it has always been a part of my practice.

MM: And how did that sports interest morph into a legal one?

JA: When I got out of college, I started coaching small college basketball in Michigan. In order to make ends meet, I sold cars and worked at a dealership that was very flexible. My boss at the dealership was Lem Barney who is an NFL Hall of Famer, and was one of the all-time great Detroit Lions. We grew close over the years. He knew of my background, and he advised me to go to law school and work with my dad and offered to help me get involved in sports. I decided to attend law school, and the summer after graduation Lem took me around to many outings and introduced me as his attorney, which gave me some credibility. Over time I started representing a number of retirees which led to me handling the largest class action in history – the MLB pension case – only two years out of school.

We lost that case in trial court in Los Angeles. However, the judge had said on the record that we were on the moral right and that the MLB should continue to negotiate with us. Ten years later they ended up paying what they called a charitable contribution to the class of players I represented. Ultimately it was a victory, but it took over a decade to arrive at the conclusion. Then, in the early-mid 2000’s I began pushing the NFL to do more for retired players. At the time, their pensions were the worst in professional sports, and included no medical benefits. These players for the most part did not make a lot of money playing. I saw cognitive decline, and pushed for the creation of the 88 plan, named after John Mackey. In the last few years, I have handled some NFL concussion cases, roughly three dozen.

MM: Would you consider Barney to be one of your early mentors?

JA: Absolutely. He used who he was to give me credibility which is something I will always remember. There have been other individuals, such as a retired player Tom Skladany. He is considered to be one of the greatest punters in history. He was the former head of the NFL Alumni Association in Ohio, and he got me in the door with retired OSU players, which has led to them seeking my representation and has grown my practice.

MM: Speaking of your involvement with the NFL, you recently ran for the head of the NFL Player’s Association. What was that experience like?

JA: Well, three years ago I got a letter out of the blue signed by 200 pro football legends telling me I was their selected nominee to run for the head of the NFLPA. I ended up running against Demaurice Smith, which was not something I anticipated doing. While I ultimately was not successful in the race, it has created space for us to do some good things for the organization, and I have helped make a lot of inroads for players. I absolutely would not run again, but it is worth noting that since the race they have changed it into an appointed rather than an elected position. I was told by multiple players that it was because I put a scare into Smith.

MM: You also spend some time teaching. Has that always been a goal of yours?

JA: No, it was more of a chance opportunity. The school (Madonna University) reached out to me because their resident sports law professor had suffered a stroke. I only agreed to do it as a fill in until the other professor recovered from the stroke, which over time turned into an adjunct position. I do it more because I have a love for passing information onto young people in a practical way. I teach the class sort of how I would have liked the class to go while I was in college and in a way that allows the students to apply the information practically in real-world scenarios.

MM: Do you believe the trend that some sports magazines, such as Sports Illustrated, have pointed out about the NFLPA and agents contributing to a mistrust of medical personnel?

JA: Yes. Based on the players I have known over the years, what has been imparted to me is there is a total lack of trust between players and team doctors because team doctors are seen to be in the pocket of NFL owners. This was especially true years ago – now, with certain Collective Bargaining Act provisions these guys can get a second opinion. The problem is that in the CBA, the NFL doctor still has the final say. An orthopedic surgeon can not cut into you until the team doctor approves it, which feels like a loss of autonomy for many players. That language needs to be cleaned up in the CBA and more players are pushing for a change.

MM: Similar to the Trent Williams scenario that is currently unfolding, do you see teams more often trying to leverage things like non-football illness designations to keep players from airing grievances?

JA: If the language is not changed in the relevant clause regarding second opinions in the CBA, then spiteful people like Dan Snyder may use designations as leverage, yes, I can see that.

MM: The 2011 CBA extends through the 2020 season, which leaves big question mark as to what the negotiations will look like as well.

JA: There has been some leaked information from the 2020 negotiations, a key piece being extending the game a season. In terms of an opportunity, I think this would be great to use as a bargaining chip to secure certain player protections. Part of my platform during my campaign was proposing 18 regular season games and two preseason games. You can use that as a bargaining chip to get better healthcare. Extra games increases the likelihood of injury or some type of harm down the line, but if you have medical coverage and top notch healthcare then you as a player may feel more covered. Now, at least once you retire, you are covered for five years. However, after those five years there is no coverage. Guys are self-medicating, drinking, opioids, committing suicide – I believe largely because they could not seek treatment after the cutoff. I would use the extended season as a bargaining chip to secure healthcare coverage until Medicare kicks in.

MM: Do you remain involved in the current state of concussion cases against the NFL?

JA: I do keep up with this, and it is difficult. There are attorneys that will say it is not difficult and I find that to be disingenuous. Rules have changed specifically in regards to what doctors you can use. I have some question as to how impartial some of these doctors truly are. Previously, there were two different mechanisms about which you could file. If you were diagnosed prior to January of 2017 you could use your own board-certified doctor. Other than that requirement, they did not have to be NFL approved. Most of the claims my clients and I successfully brought were through this mechanism. After that cutoff date, you had to utilize doctors approved by the NFL, which you know, you could sort of read between the lines on that how may bias outcomes.

MM: Can you speak on the role of Chris Seeger and the structure and style of motions and rulings around the league’s concussion settlement?

JA: Judge Brody likes and respects him so Judge Brody defers to him to the point that there has been a 5% holdback. He is fine with it because that 5% is for him . He wants 5% of every single claim to go to his firm because they did the initial work, but he was already awarded attorneys fee’s off the top. This holdback detracts from the attorneys who are doing the dirty work out here. I filed a motion that is still pending to release the 5% holdback.

A Wild Card Proposal: Should the NFL Get Rid of Divisions and Change its Playoff Format?

A Wild Card Proposal: Should the NFL Get Rid of Divisions and Change its Playoff Format?

Another NFL season, another chance that (as of the start of Week 15) an 8-8 or 7-9 makes it into the playoffs (and hosts a game on Wild Card weekend). One of the Dallas Cowboys/Philadelphia Eagles will take the NFC East title this season, and it is possible that a record under .500 will be enough to get the job done. Winning a division entitles a team to one of the NFL’s 12 (out of 32) playoff spots, along with home field advantage in the team’s first playoff matchup on Wild Card Weekend.

Denver Broncos head coach Vic Fangio is sounding the alarm on this set-up, which he said in a recent press conference leads to “the problem which is going to happen this year where probably an 8-8 team is hosting a 12-4 team.” In the alternative, Fangio proposes eliminating divisions and having each team play one game against each of the other 15 teams in its conference, plus a 16th game against a “natural rival” from the other conference, suggesting Jets-Giants, Eagles-Steelers, and Texans-Cowboys. From there, the “six best” teams make the playoffs.

Coach Fangio has no skin in the game for this year—his 5-8 Broncos have been mathematically eliminated for the 2019 postseason. But he makes an interesting point worth considering.

NFL Commissioner Roger Goodell took the opposite view: “This is not the first time this conversation has occurred or this situation’s occurred. Teams go into the season [and their] first objective is to win the division. That’s what they work on — we win the division and get into the playoffs. That is something we’ve considered over the years. I have not heard that this year and I don’t anticipate hearing it again. It’s been discussed in the past but I don’t see that as an issue. If it comes up we’ll certainly have a conversation. I don’t anticipate it.”

Since the strike-shortened 1982 season produced two sub-.500 playoff teams, only two NFL teams have made the playoffs with a losing record: the 2010 Seattle Seahawks (7-9) and the 2014 Carolina Panthers (7-8-1). Each team won its respective division that year, made the playoffs, and hosted an opponent on Wild Card weekend. You probably remember that Seahawks game—Marshawn Lynch’s “BeastQuake” run (enjoy at 0:17) ignited the Seahawks crowd of 66,000+ (at what was then Qwest Field) and propelled the Hawks to an upset victory over the highly touted 11-5 New Orleans Saints.

In 2010, two 10-6 teams (the New York Giants and the Tampa Bay Buccaneers) watched the BeastQuake run from their couches while the Seahawks were in the playoffs. And in 2014, the Panthers got into the postseason at the expense of the 10-6 Eagles (how the tables have turned). This year, both the Chicago Bears and the (defending NFC Champion) Los Angeles Rams could miss the playoffs with winning records while the NFC East winner advances. Is that fair?

The benefits of Fangio’s proposal are simple. The six most deserving teams would make the playoffs each season, seeded according to their record with no regard to arbitrary geographic divisions. He likened his idea to the way the NBA administers its playoffs—there, eight teams from each conference make it in. Adding to its fairness factor would be the fact that using in-conference record as a first tiebreaker would provide a metric that is the same for each team—everyone plays the same opponents. (That might cheapen the proposed one-off rivalry matchup, however, as “in-conference” record would just be the record from the other 15 games.)

I am, however, more inclined to agree with Commissioner Goodell’s position for three reasons:

First, divisions are good for the league because rivalries add to the intrigue. Jets-Giants, Eagles-Steelers, and Cowboys-Texans are exciting in-state games, but they are not the storied rivalries that make the league so interesting. Here, I am thinking about Steelers-Ravens, 49ers-Seahawks, Bears-Packers, and many others. These rivalries have endured for so long because these teams have routinely beat the snot out of each other, year in and year out, in pursuit of their respective divisions’ titles. And fans get to see these games twice a year, one at each team’s field, often with one of them in Week 17 carrying playoff implications. It is the NFL equivalent of the divisional rivalries that built college football: Texas-Oklahoma, Michigan-Ohio State, USC-UCLA, and many others.

Sure, some rivalries come along that last for a few seasons, such as Patriots-Colts at the height of Tom Brady and Peyton Manning’s dominance. But the ones that endure for decades are based not on players, but on the divisional set-up of the league. There is an elegant simplicity to having one team you root for, and two or three teams you root against. Fangio’s proposal would completely blow that up. A little friction and conflict is a good thing, especially in a sport like football.

Second, inter-conference play is a good thing. Isolating the NFC and AFC from one another, which the Fangio proposal would inevitably do, disincentivizes following the other conference and prevents fans from seeing other franchises, as happens when out-of-conference opponents get scheduled against these fans’ favorite teams. This is arguably irrelevant in an era of fantasy football, Madden, and NFL RedZone, but it is something to consider. We like inter-conference play because it changes up the schedule, adds some unpredictable match-ups to the season, and may even afford fans the opportunity to see (in person) a superstar player who wouldn’t otherwise come to their team’s stadium—think Patrick Mahomes’ Chiefs playing the Lions in Detroit earlier this season.

Third, what are we really talking about here—upending everything because a 10-6 team or two, which already didn’t win its division and lost out to two other 10-6 or better teams in the Wild Card race, might miss the postseason here and there? Do we need to fundamentally realign the carefully crafted NFL scheduling system, build in multiple mandatory cross-country road trips for certain teams every season, end inter-conference play, and strike a death blow to the league’s great rivalries all because the Bears might go 9-7 this year?

My answer to that second question is no. Commissioner Goodell is right: If you want to guarantee you will make the playoffs (a means to an end to winning the Super Bowl), go be the best in your division first. Complaining about the Cowboys because you could not secure one of the three playoff slots available to you (the division title and either of the two Wild Cards)? To borrow a phrase that Ravens quarterback Lamar Jackson has championed in recent weeks: Nobody cares, work harder. The existence of the “Wild Card” itself, a way to bail out teams that did not win their divisions, was a post-AFL/NFL merger compromise. It started as one team per conference, and the Pro Football Hall of Fame’s website admits that adding a second Wild Card team was primarily about increasing television revenue and streamlining a complex tie-breaking system.

I will acknowledge that Fangio makes an argument that is difficult to overcome, however, and that is the issue of home field on Wild Card Weekend. It does seem a bit ridiculous that the Seahawks, at all of 7-9, got to enjoy the benefits of playing in front of the 12th Man (especially post-BeastQuake) against the 11-5 Saints in the 2010-11 playoffs. And no, if the second-place NFC West team ends up with 12 wins, it should not have to go on the road against a .500 or worse NFC East winner.

So here is a compromise for the Fangios and Goodells of the football world: Let’s keep the six teams the same, but re-seed ahead of the playoffs once we have the six. If you win your division, you’re in, but it is not a sufficient condition for home field on Wild Card Weekend. And if you’re so good that despite not winning your division, you are one of the two best non-division winners in your conference, you still have a shot at a first-round bye. If the Seahawks, for example, end up being the second-best team in the NFC this season, it doesn’t mean we kick the Cowboys or Eagles out of the playoffs. But it wouldn’t radically alter the league to treat them like the second-best team and give them a bye, while making this year’s NFC East winner the sixth seed and making the team to go on the road to stay alive.

If the third losing team this decade makes it into the 2019-20 NFL playoffs, expect this debate to crop back up. When it eventually does, this year or in the future, this idea should a balance between the two well-reasoned viewpoints currently in the public sphere.

Eli Nachmany is a Sports Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first year student at Harvard Law School (Class of 2022).

“NFL Network ID” by Brett Morris is licensed under CC BY-NC-ND 4.0